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Aluminium/Bauxite

Column: Another spin of the giant LME aluminium stocks carousel – by Andy Home (Reuters U.K. – Janaury 14, 2020)

https://uk.reuters.com/

LONDON (Reuters) – The giant London Metal Exchange (LME) aluminium stocks carousel is spinning again. LME-registered inventory surged by 58% to a two-year high of 1.49 million tonnes between the middle of November and the middle of December as 600,000 tonnes of metal flooded into exchange warehouses.

No sooner had it arrived than the cancellations started. A total 633,675 tonnes have been earmarked for physical load-out since Dec. 16, including another 35,075 tonnes on Monday.

Drawdowns are now accelerating. Load-outs averaged 13,330 tonnes per day last week. Monday’s tally of 15,375 tonnes was the highest daily departure rate since May last year. There are another 619,075 tonnes to follow.

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‘They lost’: Canadian aluminum industry, opposition balk over auto provisions in new NAFTA – by Naomi Powell (Financial Post – December 12, 2019)

https://business.financialpost.com/

The exclusion of aluminum from tighter auto requirements in the new NAFTA could see Mexico become a back door for China to push the metal into the United States, industry officials and union leaders say.

Canada, the United States and Mexico agreed Tuesday to an amended North American Free Trade Agreement that includes tougher enforcement provisions for labour reforms, a strengthened dispute resolution mechanism, and weaker protections for the pharmaceutical industry.

The deal also included a last-minute change to a requirement calling for 70 per cent of the steel and aluminum used in auto production to be purchased in North America. Under the newly tweaked rules, steel must be “melted and poured” by primary steelmakers in North America in order to receive preferential tariff treatment. No provision was added for aluminum.

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COLUMN-Aluminium producers prepare for troubled times ahead – by Andy Home (Reuters U.S. – December 9, 2019)

https://www.reuters.com/

LONDON, Dec 9 (Reuters) – The aluminium market is in trouble again. The London Metal Exchange (LME) price touched a three-year low of $1,705 per tonne in October and has failed to stage any significant bounce over the intervening period. It is currently trading around the $1,760 level.

Earlier this year there was a lot of excited talk in the market about growing supply deficits and falling stocks. Fast forward to today and LME stocks are surging again and no-one is talking about deficits any more.

LME stocks are a poor lens through which to understand aluminium’s dynamics but the rapid increase in visible tonnage has reinforced concerns about a deteriorating demand outlook.

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UPDATE 7-Trump, citing U.S. farmers, slaps metal tariffs on Brazil, Argentina – by Andrea Shalal and Gabriel Stargardter (Reuters Africa – December 2, 2019)

https://af.reuters.com/

WASHINGTON/RIO DE JANEIRO, Dec 2 (Reuters) – U.S. President Donald Trump ambushed Brazil and Argentina on Monday, announcing he would restore tariffs on U.S. steel and aluminum imports from the two countries in apparent retaliation for currency weakness he said was hurting U.S. farmers.

“Effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries,” Trump wrote in an early morning tweet that sent officials from both countries scrambling for explanations from Washington. He added that Brazil and Argentina were “presiding over a massive devaluation of their currencies.”

In fact, the opposite is true: Both countries have actively been trying to strengthen their respective currencies against the dollar. The real and the peso have been buffeted by weakness partially linked to Trump’s trade battle with China.

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Copper prices seen stifled by growth fears next year: Reuters poll – by Eric Onstad and K. Sathya Narayanan (Reuters U.S. – October 28, 2019)

https://www.reuters.com/

LONDON/ (Reuters) – Prices of copper and other industrial metals are expected to be capped next year as weak economic growth weighs on the market, a Reuters poll showed.

The London Metal Exchange index of six base metals has inched up only 1% so far this year, held back by worries about a possible global recession and a trade war between the United States and top metals consumer China.

But the average is deceptive, because sharp gains for nickel of over 50% cover the fact that half of the metals are in the red, with losses of up to 15%.

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Rio Tinto says miners need to leverage technology as scrutiny of the industry rises (Reuters U.S. – October 28, 2019)

https://www.reuters.com/

LONDON, Oct 28 (Reuters) – Mining companies should make more use of technology to respond to increasing demands from investors and communities for responsible mining practices, Rio Tinto CEO Jean-Sébastien Jacques said on Monday.

Technologies such as autonomous rail-cars and increased automation can lower the impact of the industry on the environment as well as raise profit margins, he said, adding that blockchain can be deployed to track if the supply chain met ethical standards.

“There is absolutely no doubt in my mind we will face greater regulation and scrutiny,” Jacques said in a keynote speech marking the beginning of London Metal Exchange (LME) Week in London.

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Column: Sustainability the new battleground for aluminium producers – by Andy Home (Reuters U.K. – October 22, 2019)

https://uk.reuters.com/

LONDON (Reuters) – Another year, another portfolio review by Alcoa. The U.S. aluminium producer has just announced a five-year review of around 4.0 million tonnes of alumina capacity and 1.5 million tonnes of smelter capacity.

Assets will be improved, curtailed, closed or sold. It’s not quite an annual event but Alcoa shareholders have been here many times before as the company keeps trying to move down the cost curve in the face of chronically depressed prices.

On the London Metal Exchange (LME) three-month aluminium has ground steadily lower over the course of 2019 and at a current $1,720 per tonne is close to the near three-year low of $1,705 recorded earlier this month.

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Column: Mind the alumina gap as Western and Chinese prices diverge – by Andy Home (Reuters U.K. – October 10, 2019)

https://uk.reuters.com/

LONDON (Reuters) – The alumina market is currently seeing a widening gap in pricing between China and the rest of the world. Outside of China the price of the aluminium input has fallen below $300 per tonne for the first time since the second quarter of 2017.

Last year’s explosive rallies above $600 per tonne are a distant memory as the full return of the giant Alunorte refinery in Brazil stabilises supply. In China, by contrast, local prices have rallied by 10% over the last two months to a current 2,650 yuan ($365) per tonne, according to Shanghai Metal Market.

The Chinese supply chain is proving more unpredictable this year with domestic production hit by unforeseen outages, environmental curtailments and declining raw material availability. Divergence between Chinese and Western alumina prices is not new but they tend to move broadly in tandem not in completely different directions.

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Column: Falling output and stocks fail to halt aluminium price slide – by Andy Home (Reuters U.K. – October 1, 2019)

https://uk.reuters.com/

LONDON (Reuters) – Global aluminium production is contracting this year. Cumulative output in the first eight months of 2019 slid by 0.6% to 42.5 million tonnes with production down in both China, the world’s dominant producer, and the rest of the world, according to the International Aluminium Institute (IAI).

If the trend continues, this will be the first year since 2009 to see a simultaneous production decline in both halves of the aluminium universe.

Visible inventory, meanwhile, has fallen to multi-year lows. Total stocks registered with the London Metal Exchange (LME) last week slipped below 900,000 tonnes for the first time since 2008, while Shanghai Futures Exchange stocks are at two-year lows.

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Aluminum Markets Flash a Warning for the Economy – by Mark Burton (Bloomberg News – September 30, 2019)

https://www.bloomberg.com/

(Bloomberg) — When aluminum demand last contracted during the financial crisis and unwanted metal started flooding into warehouses, it took more than a decade to work through the glut. Now, the market is bracing for another sharp increase in inventories as demand growth grinds to a halt.

Aluminum has tumbled to a two-and-a-half-year low as slowing global growth and the U.S.-China trade war hurt demand for the metal used in airplanes, automobiles and beer cans.

While stockpiles tracked by the London Metal Exchange fell to their lowest since 2007 last week, traders say inventories are building in the physical market as weaker order books leave consumers with more metal than they need.

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Column: Sliding Japan premium confirms aluminium’s demand problem – by Andy Home (Reuters U.K. – September 13, 2019)

https://uk.reuters.com/

LONDON (Reuters) – A sharp fall in Japanese physical premiums for fourth quarter shipments is the latest sign that aluminium is not immune from the demand weakness that is sapping the industrial metals complex.

The timing, however, is ironic. Years of chronic overproduction appeared to be coming to an end with global output actually falling so far this year and large off-market stocks finally starting to diminish.

Demand hasn’t been a problem for aluminium in the past, thanks to its growing usage in an automotive sector focused on light-weighting vehicles. That has changed over the course of this year.

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Profit slumps at Australia’s South32 as trade war hits aluminum prices – by Aditya Soni (Reuters U.S. – August 21, 2019)

https://www.reuters.com/

(Reuters) – Australian miner South32 Ltd reported a bigger-than-expected 25% drop in annual profit as the trade war between China and the United States hurt aluminum prices, sending its shares lower by as much as 5.8% on Thursday.

South32 also said it was in talks to sell its South Africa thermal coal business to Johannesburg-based Seriti Resources, the latest company to get out of energy coal at a time when investor pressure and climate change concerns are prompting businesses to limit their exposure to fossil fuels.

The miner’s fortunes have soured in tandem with a decline in aluminum prices, which have come under pressure this year due to a slowdown in China – the world’s biggest consumer of the metal – as the Sino-U.S. trade war has escalated.

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Is Endlessly Recyclable Aluminum The Answer To The Global Recycling Crisis? – by Ariel Knoebel (Forbes Magazine – August 13, 2019)

https://www.forbes.com/

As of August 20, San Francisco International Airport will no longer allow plastic water bottles in airport terminals of foodservice and retail locations. According to the airport’s website, this is “part of an effort to address plastic pollution and the recent collapse of the plastic recycling market.”

China banned imports of foreign plastic for recycling in January 2018. Too much contaminated waste was coming into the country, creating environmental hazards.

Before the ban, 95% of recycled plastics from the EU and 70% from the US were sent to China for processing. In the past six months, Americans have been struggling to continue recycling programs across the country, as processing prices have jumped, and many facilities have stopped accepting many types of plastics.

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Aluminum producers in Canada cash in on U.S. tariff exemption – by Pratima Desai and Nichola Saminather (Reuters Canada – July 23, 2019)

https://ca.reuters.com/

LONDON/TORONTO (Reuters) – Canada’s exemption from U.S. tariffs on imports of aluminum metal has boosted earnings at the Canadian operations of companies such as Rio Tinto and Alcoa, but has not cut costs for U.S. consumers.

In May, the United States lifted the Section 232 tariff of 10% imposed on Canadian imports of aluminum, a vital ingredient for auto makers, drinks firms and military equipment companies.

Aluminum costs for U.S. consumers are the benchmark price on the London Metal Exchange at around $1,810 a tonne plus the physical market premium, around $400 a tonne. Analysts say $192 of the premium is the tariff non-exempt producers pay.

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Mining Giant to Spend Billions to Halt Indonesian Metal Imports – by Eko Listiyorini and Tassia Sipahutar (Bloomberg/Yahoo Finance – July 18, 2019)

https://finance.yahoo.com/

(Bloomberg) — Indonesia plans to spend billions of dollars in building aluminum and nickel smelters as it seeks to cut reliance on imports of finished metal and stem exports of raw minerals.

State-owned PT Indonesia Asahan Aluminium will earmark as much as $10 billion over the next five years to develop refineries and smelters, according to President Director Budi Gunadi Sadikin. The investment will be made by the company and its units including nickel and bauxite miner PT Aneka Tambang, he said.

Indonesia is seeking to reshape its mining industry by making it mandatory for miners to build smelters after decades of free exports of raw materials left it reliant on costly imports to meet demand.

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